BILL ANALYSIS S.B. 641 By: Montford (Holzheauser) May 8, 1995 Committee Report (Unamended) BACKGROUND During the 73rd Legislative Session, H.B. 1461 was enacted which transferred certain tax administration functions from the Department of Insurance to the Comptroller's office. In evaluating these functions, the Comptroller recommends adjusting certain provisions. PURPOSE This bill proposes to make several changes relating to the administration of insurance premium taxes and the collection of certain insurance fees. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Reenacts and amends Section 12 (Independently Procured Insurance Tax), Article 1.14-1, Insurance Code, as follows: (a) Requires every insured who procures insurance in accordance with Section 2(b)4 of this Article to file a report with the comptroller and pay an independently procured insurance tax of 4.85 percent. Deletes additional requirements. (b) Requires the report to be filed and any tax due to be paid by the insured or by any other person designated by the insured. Provides that the report and tax are due on or before a certain date. Deletes provisions regarding a premium receipts tax. (c) Requires the tax payable to be computed on the portions of the premium which are properly allocated to the risks or exposures located in this state if a policy covers risks or exposures only partially. Deletes provisions regarding premiums that are taxable. (d) Makes a conforming reference to Subsection (b). (e) Redesignates existing Subsection (g). SECTION 2. Amends Section 12(a), Article 1.14-2, Insurance Code, by changing the date surplus lines agents must report the amount of gross premiums received to March 1st; and exempts from taxation premiums properly allocated to other states. SECTION 3. Amends Section 5 (Gross Premium Receipts Defined), Article 4.10, Insurance Code, by redefining "gross premium receipts" as the total gross amount of premiums actually written during the taxable year. SECTION 4. Amends Article 8.21, Insurance Code, to specify that the Texas Department of Insurance, rather than the State Board of Insurance, charges a fee of $20 for filing the annual statement required by this chapter. Requires the comptroller to collect the fee. SECTION 5. Amends Article 16.22 (Fees), Insurance Code, to reflect the name change from the State Board of Insurance to the Texas Department of Insurance; and to clarify that the Department is responsible for collecting the fees for filing or amending a certificate of authority. Specifies that the comptroller shall collect the annual filing fee. SECTION 6. Amends Article 17.21 (Fees), Insurance Code, to reflect the name change from the State Board of Insurance to the Texas Department of Insurance; and to clarify that the Department is responsible for collecting the fees for filing or amending a certificate of authority. Specifies that the comptroller shall collect the annual filing fee. SECTION 7. Amends Article 19.11, Insurance Code, to require said exchanges to be subject to the provisions of certain Articles of this Code. Requires the comptroller to collect the taxes and the annual statement filing fee. SECTION 8. Amends Subsection (a), Section 32, Texas Health Maintenance Organization Act, (Article 20A.32, Vernon's Texas Insurance Code) by adding Subdivision (4), to require the comptroller to collect the annual report filing fee prescribed by Subdivision (1)(B) of this subsection. SECTION 9. Amends Subsection A, Article 21.46, Insurance Code, to require the comptroller to prescribe the due date for the filing of the report and payment of the tax under this article. SECTION 10. Amends Article 23.08, Insurance Code, to require the comptroller to collect an annual statement filing fee. Deletes requirement that fees shall be deposited in the state treasury to the credit of the department operating the fund. SECTION 11. Effective date: September 1, 1995. Makes application of this Act prospective. SECTION 12. Emergency clause. SUMMARY OF COMMITTEE ACTION On April 27, 1995, the committee met in a formal meeting and considered S.B. 641. By a record vote of 8 ayes, 0 nays, 0 present not voting and 3 absent, the committee voted to report S.B. 641 to the House without amendment with the recommendation that it do pass.